Xbrane Biopharma
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Xbrane Biopharma |
Good manufacturing status allows sales to start |
Update and FY16 results |
Pharma & biotech |
1 March 2017 |
Share price performance
Business description
Next events
Analysts
Xbrane Biopharma is a research client of Edison Investment Research Limited |
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With Italian GMP approval of the Spherotide one-month formulation, Xbrane can ship a SEK7m order to Iran. A Chinese deal worth SEK17m upfront, $8m total, may be signed in H117. European partnering and launches are possible from 2019 after clinical trials. Xbrane (or a partner) may sell Xlucane, its low-cost biosimilar of Lucentis (2015 sales $3.6bn), in the US after 2021 and from 2022 in Europe. A study has been done on pilot scale batches showing high biosimilarity, giving a solid basis for scale up.
Year |
Revenue (SEKm) |
PBT* |
EPS* |
DPS |
P/E |
Yield |
12/15 |
0.4 |
(11.0) |
(2.5) |
0.0 |
N/A |
N/A |
12/16 |
2.5 |
(29.5) |
(5.9) |
0.0 |
N/A |
N/A |
12/17e |
24.0 |
(16.9) |
(3.6) |
0.0 |
N/A |
N/A |
12/18e |
22.1 |
(95.5) |
(20.1) |
0.0 |
N/A |
N/A |
Note: *PBT and EPS are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments.
Prostate cancer: GMP status for triptorelin generic
Triptorelin, sold as various brands, is one of a well-known class used to treat advanced prostate cancer, endometriosis and uterine fibroids. Sales in 2015 for these indications were $380m. Initial Spherotide sales are planned in 2017 with a SEK7m order to Iran which can now be shipped as Xbrane has good Manufacturing Practice (GMP) certification from the Italian authorities. An agreed, but not signed, Chinese $8m deal could yield SEK17m cash in H117, with sales perhaps from 2021/22. EU marketing is expected from 2019 via a partner and a further deal.
Xlucane has high biosimilarity to Lucentis
Xlucane is developing a biosimilar of Lucentis (ranibizumab, Roche/Novartis; 2015 sales: $3.6bn) to treat wet age-related macular degeneration. During Q1 2017 Xbrane announced that Xlucane has shown high biosimilarity to Lucentis in the main parameters according to FDA and EMA biosimilarity guidelines. This is an important milestone to scale up production and for the discussion with regulatory authorities to plan clinical trials aimed at main markets. Going forward Xbrane will look to launch Xlucane in Iran via a distributor and gain a worldwide partnership (ex Iran). Formycon (with bioeq GmbH) is running a Phase III trial aiming for H120 data. Pfenex has Phase I/II data on PF582 but now has no partner.
Valuation: Attractive markets
The value of the Edison forecast cash flows between 2017 and 2030 is unchanged at SEK372m and equates to SEK78 per share. We assume a partner is prepared to fund half the SEK230m cost of Xlucane trials from 2017, but there is still potential for further dilution. Year-end accounts show cash of SEK31m, lower than the SEK38m formerly expected partly as a shareholder SEK10m loan to Serendipity was repaid and not converted to equity. With the expected SEK17m Chinese investment in H1 and SEK7m in bulk sales to Iran, this cash covers the expected 2017 cash needs forecast by Edison. Management anticipates that revenue from deals and sales could meet 2018 cash requirements; a Spherotide EU partnering deal is anticipated, similar to the China deal. Delayed or smaller deals could lead to a funding need, which we estimate at up to SEK100m.
Exhibit 1: Financial summary
SEK000s |
2015 |
2016 |
2017e |
2018e |
||
Year end 31 December |
GAAP |
GAAP |
GAAP |
GAAP |
||
PROFIT & LOSS |
|
|
|
|||
Revenue |
|
|
393 |
2,490 |
24,000 |
22,050 |
Cost of Sales |
(257) |
(1,180) |
(3,500) |
(11,025) |
||
Gross Profit |
136 |
1,310 |
20,500 |
11,025 |
||
EBITDA |
|
|
(10,660) |
(26,882) |
(13,640) |
(92,220) |
Operating Profit (before GW and except.) |
|
(10,710) |
(29,975) |
(16,733) |
(95,314) |
|
Intangible Amortisation |
(1,391) |
(5,446) |
(5,446) |
(5,446) |
||
Other |
0 |
544 |
0 |
0 |
||
Operating Profit |
(12,101) |
(34,877) |
(22,179) |
(100,760) |
||
Net Interest |
(294) |
(67) |
(175) |
(205) |
||
Exceptionals |
0 |
0 |
0 |
0 |
||
Profit Before Tax (norm) |
|
|
(11,004) |
(29,498) |
(16,908) |
(95,518) |
Profit Before Tax (FRS 3) |
|
|
(12,395) |
(34,944) |
(22,354) |
(100,964) |
Tax |
550 |
1,655 |
0 |
0 |
||
Profit After Tax (norm) |
(10,453) |
(27,843) |
(16,908) |
(95,518) |
||
Profit After Tax (FRS 3) |
(11,845) |
(33,289) |
(22,354) |
(100,964) |
||
Average Number of Shares Outstanding (m) |
4.1 |
4.8 |
4.7 |
4.8 |
||
EPS - normalised (SEK) |
|
|
(2.5) |
(5.9) |
(3.6) |
(20.1) |
EPS - normalised fully diluted (öre) |
|
|
(254.4) |
(585.5) |
(363.1) |
(2,008.6) |
EPS - FRS 3 (SEK) |
|
|
(2.9) |
(7.0) |
(4.8) |
(21.2) |
Dividend per share (öre) |
0 |
0 |
0 |
0 |
||
BALANCE SHEET |
||||||
Fixed Assets |
|
|
67,897 |
74,584 |
72,638 |
70,692 |
Intangible Assets |
57,873 |
57,368 |
55,422 |
53,476 |
||
Tangible Assets |
10,024 |
16,581 |
16,581 |
16,581 |
||
Investments |
0 |
635 |
635 |
635 |
||
Current Assets |
|
|
7,433 |
43,526 |
25,755 |
29,736 |
Stocks |
161 |
2,497 |
2,497 |
2,497 |
||
Debtors |
4,585 |
9,691 |
7,114 |
10,877 |
||
Cash |
2,688 |
31,338 |
16,144 |
16,363 |
||
Other current assets |
0 |
0 |
0 |
0 |
||
Current Liabilities |
|
|
(23,405) |
(5,884) |
(8,521) |
(11,521) |
Creditors |
(13,405) |
(5,884) |
(8,521) |
(11,521) |
||
Short term borrowings |
(10,000) |
0 |
0 |
0 |
||
Long Term Liabilities |
|
|
(4,064) |
(4,286) |
(4,286) |
(104,286) |
Long term borrowings |
0 |
0 |
0 |
(100,000) |
||
Other long term liabilities |
(4,064) |
(4,286) |
(4,286) |
(4,286) |
||
Net Assets |
|
|
47,862 |
107,940 |
85,586 |
(15,378) |
CASH FLOW |
||||||
Operating Cash Flow |
|
|
(12,643) |
(37,759) |
(8,427) |
(92,983) |
Net Interest |
(294) |
(67) |
(175) |
(205) |
||
Tax |
550 |
(1,655) |
0 |
0 |
||
Capex |
(1,127) |
(12,766) |
(6,593) |
(6,593) |
||
Acquisitions/disposals |
0 |
0 |
0 |
0 |
||
Financing |
0 |
80,898 |
0 |
0 |
||
Dividends |
0 |
0 |
0 |
0 |
||
Net Cash Flow |
(13,513) |
28,651 |
(15,195) |
(99,781) |
||
Opening net debt/(cash) |
|
|
(6,201) |
7,312 |
(31,338) |
(16,144) |
HP finance leases initiated |
0 |
0 |
0 |
0 |
||
Other |
0 |
10,000 |
0 |
0 |
||
Closing net debt/(cash) |
|
|
7,312 |
(31,338) |
(16,144) |
83,637 |
Source: Edison Investment Research, Xbrane Biopharma accounts
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